The electric carmaker's stock fell as much as 7% on Monday after Elon Musk announced that he would set up a new political party.

Tesla stock price was down after Musk said he's formed the America Party, the latest development in the billionaire's feud with President Trump.

Mr. Musk’s involvement in politics and his financial support for the president’s campaign was once seen by investors as a benefit to Tesla, fueling a steep rise in company shares after the election last year. That association has now turned into a liability. Tesla shares are down 40 percent from their peak in December.